Impact Investing

57 Pages Posted: 20 Dec 2015 Last revised: 25 Jan 2017

Brad M. Barber

University of California, Davis

Adair Morse

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER)

Ayako Yasuda

University of California, Davis - Graduate School of Management

Date Written: January 17, 2017

Abstract

We study investments in impact funds, defined as venture capital or growth equity funds with dual objectives of generating financial returns and positive externalities. Being an impact fund elevates a fund’s marginal investment rate by 14.1% relative to a traditional VC fund, even more for funds focused on environmental, poverty, and minority/women issues. Europeans and UNPRI signatories have sharply higher demand for impact. Three investor attributes – household-backed capital, mission-oriented investors, and investors facing political/regulatory pressure to invest in impact – account for the higher impact demand. In contrast, legal restrictions against impact (e.g., ERISA) hinder 25% of total demand.

Keywords: Venture Capital, private equity, impact investment, socially responsible investment, UN principles of responsible investment, sustainable investing, corporate social responsibility.

JEL Classification: G1, G2

Suggested Citation

Barber, Brad M. and Morse, Adair and Yasuda, Ayako, Impact Investing (January 17, 2017). Available at SSRN: https://ssrn.com/abstract=2705556

Brad M. Barber

University of California, Davis ( email )

Graduate School of Management
One Shields Avenue
Davis, CA 95616
United States
530-752-0512 (Phone)
530-752-2924 (Fax)

Adair Morse

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Ayako Yasuda (Contact Author)

University of California, Davis - Graduate School of Management ( email )

One Shields Avenue
Davis, CA 95616
United States
530-752-0775 (Phone)
530-752-2924 (Fax)

HOME PAGE: http://www.ayakoyasuda.com

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